LAG Hamm – Prohibited surveillance in the workplace

LAG Hamm – Prohibited surveillance in the workplace

LAG Hamm - Prohibited surveillance in the workplace

Monitoring employees using video surveillance is only permitted within narrow boundaries. Illegal recordings cannot therefore be used as evidence in the context of workplace legal disputes.

There are justifiable reasons for monitoring the workplace using video cameras. Particularly in areas which are accessible to the public such as storefronts, video cameras are a common sight. However, this needs to be readily apparent to customers and employees alike. We at the commercial law firm GRP Rainer Rechtsanwälte also note that the recordings must always be deleted as soon as possible once they are no longer capable of fulfilling their intended purpose or the legitimate interests of the persons“ affected preclude their ongoing storage.

In a case heard by the Landesarbeitsgericht (LAG) Hamm, the Regional Labour Court of Hamm, a storefront had been monitored by three video cameras. This was clearly indicated and the employees were informed. According to the employer, the video surveillance was meant to provide information on criminal offences committed by third parties. The employer went on to claim, however, that an analysis of the video footage also revealed that one of the employees had acquired money or goods by illegal means. The employer terminated the employment relationship with immediate effect and demanded compensation in the amount of approximately 10,000 euros.

The employee in question initially instituted an action for wrongful dismissal but later withdrew this. She nonetheless demanded payment of her outstanding wages and that the claim for compensation be dismissed. The relevant labour court found in favour of the employee, and the employer“s subsequent appeal before the LAG Hamm was unsuccessful.

In its judgment from June 12, 2017, the LAG Hamm held that the employer had not been able to demonstrate misconduct that would justify the extent of the claim for compensation. Furthermore, the video footage could not be used as evidence. The Court went on to say that the video sequences were excluded from being used as evidence for reasons of data protection and individual privacy. It ruled that any data collected must always be deleted immediately once it is no longer required for the purposes of achieving its aim or the legitimate interests of those affected preclude its ongoing storage. The Court proceeded on the basis of a period of one to two or certainly no more than a few business days. In the instant case, the data had been stored for three months. After weighing up the interests of all sides, the OLG found that this data protection violation gave rise to an exclusion of evidence.

Lawyers who are experienced in the field of employment law can advise on all matters pertaining to the workplace.

https://www.grprainer.com/en/legal-advice/employment-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

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GRP Rainer LLP
Michael Rainer
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+49 221-27 22 75-0
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info@grprainer.com
http://www.grprainer.com/en

Power of attorney can constitute a valid will

Power of attorney can constitute a valid will

Power of attorney can constitute a valid will

It is possible for a power of attorney to constitute a valid will. That was the verdict of the Oberlandesgericht (OLG) Hamm, the Higher Regional Court of Hamm, in a ruling from May 11, 2017 (Az.: 10 U 64/16).

A will should always be clearly recognizable as the testator“s final wishes to prevent disputes from arising among the heirs. We at the law firm GRP Rainer Rechtsanwälte note that it will ideally have an unambiguous heading such as „my will“ or „my final wishes“. That being said, even personally prepared documents that, for instance, feature the heading „Vollmacht“, i.e. „power of attorney“, are capable of constituting a valid will. That was the verdict of the Oberlandesgericht Hamm in a recently published ruling.

In the case in question, the testatrix had drafted a testamentary disposition featuring the heading „Testament“ (will) in which she provided that her two sisters were to inherit half of her detached house each. Only a few days later, the testatrix prepared another document with the heading „Vollmacht“ in which she granted her niece power of attorney in relation to her savings contract with a building society, her checking account, savings book and financial investments beyond her death and to have the balances paid out to her.

There was no disagreement regarding the fact that the testatrix had designated her sisters as co-heirs to half of the estate each as per the will, as the house represented the testatrix“s main asset. The probate court issued a certificate of inheritance accordingly.

What was disputed, however, was whether the testatrix“s niece was entitled to inherit. The latter argued that her aunt had allocated the balances to her as legacies and that the second document was not merely a power of attorney but rather a will. The OLG Hamm found in the niece“s favour, concluding that the power of attorney granted constituted a valid will. The Court went on to say that it had been personally written and signed by the testatrix, and thus met the formal requirements for it to be a will. Moreover, it was possible to identify a serious intention to make a will; the fact that the document featured „Vollmacht“ as its heading did not, according to the OLG, count against this, because it was already clear from the will that the testatrix was not familiar with the usual wording associated with a testamentary disposition. It could therefore be assumed that the testatrix had wanted to bequeath the balances to her niece.

A will should always be clearly worded to ensure that testamentary dispositions are in fact capable of being implemented in accordance with the wishes of the testator. Lawyers who are experienced in the field of succession law can offer advice.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

Breach of duty by management – Special audit in cases involving a GmbH

Breach of duty by management – Special audit in cases involving a GmbH

Breach of duty by management - Special audit in cases involving a GmbH

If there is reason to suspect that management has breached its duties, the shareholders of a GmbH, a type of a German private limited company, can request that a special audit be carried out.

We at the commercial law firm GRP Rainer Rechtsanwälte note that the responsibilities of the shareholders of a GmbH include approving the annual financial statement as well as scrutinizing and monitoring management. In a judgment from December 14, 2017, the Oberlandesgericht (OLG) München, the Higher Regional Court of Munich, ruled that the right to scrutinize and monitor management also encompasses the right to appoint special auditors (Az.: 23 U 1481/17).

According to the OLG München“s ruling, a special audit is only impermissible if the application for its implementation is unlawful and constitutes a breach of a fiduciary duty by the shareholder filing the application. Moreover, the implicated shareholder has no voting rights in relation to the preparatory actions and decisions taken in respect of a special audit.

If shareholders of a GmbH are concerned that management has breached its duties, they can request a special audit. For the purposes of adopting a resolution, a simple majority is sufficient. In the case before the OLG München, two families with equal shares in a GmbH & Co. KG, a type of limited partnership with a GmbH as general partner, as well as a Komplementär-GmbH, a.k.a. a general partner GmbH, had fallen out. One of the families filed for a special audit and later voted in favour of this measure, whereas the other family voted against it. The managing director was not entitled to vote and the resolution concerning a special audit was passed.

The managing director then raised a legal complaint against this. However, the lawsuit was largely unsuccessful. The OLG München held that the shareholders of a GmbH are entitled to appoint special auditors. It ruled that in order for this to happen it is necessary for a tangible cause informed by the facts and circumstances to be presented to the general meeting of the shareholders. The Court noted that the suspicion of a breach of duty by management must follow from these facts and circumstances. Furthermore, the special audit must prove to be expedient in the form in which it was specifically requested. The Court went on to say that a special audit is only impermissible if the application is unlawful and constitutes a breach of a fiduciary duty by the shareholder filing the application.

Disputes among the shareholders of a GmbH are a regular occurrence. If these differences of opinion cannot be cleared up, lawyers who are experienced in the field of company law can offer advice and recommend targeted resolutions.

https://www.grprainer.com/en/legal-advice/company-law/gmbh-limited-liability-company.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

BGH – Abuse of superior market power is a violation of antitrust law

BGH – Abuse of superior market power is a violation of antitrust law

BGH - Abuse of superior market power is a violation of antitrust law

If a company abuses its market power, this constitutes a violation of antitrust law. In a ruling from January 23, 2018, the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, has bolstered the Bundeskartellamt, Germany“s Federal Cartel Office (Az.: KVR 3/17).

Companies with superior market power are not allowed to put pressure on suppliers to obtain undue advantages for themselves. This kind of abuse of market power constitutes a violation of the Gesetz gegen Wettbewerbsbeschränkungen (GWB), the German Act Against Restraints of Competition. This so-called „Anzapfverbot“, i.e. prohibition on demanding unjustified benefits from suppliers, is applicable not only to businesses in a dominant market position; we at the commercial law firm GRP Rainer Rechtsanwälte note that it also applies in cases where small or medium-sized companies are dependent on a buyer and the latter therefore has superior market power.

The issue of when this kind of abuse can be said to have occurred has since come to the attention of the BGH. The case in question concerned a supermarket chain that had acquired a number of stores from a discount supermarket. Talks took place with the suppliers during the course of the acquisition with a view to obtaining favourable terms in the form of so-called „Hochzeitsrabatte“, i.e. wedding discounts. In addition to demanding the best possible terms in each case, other benefits, such as „Partnerschaftsvergütung“, a.k.a. partnership compensation, were also requested.

The Bundeskartellamt deemed this to be an abuse of market power by the supermarket chain and thus a violation of the GWB (Az.: B2-58/09). The Cartel Office“s decision was then overturned by the Oberlandesgericht (OLG) Düsseldorf, the Higher Regional Court of Düsseldorf. The OLG proceeded on the assumption that the negotiations involving the supermarket chain and the suppliers were between two parties in an equally strong position. The Court held that the supermarket chain had not abused its market power and that the discounts had been permissible.

The BGH has now overridden important aspects of the OLG Düsseldorf“s judgment in appeal proceedings. The former concluded that the supermarket chain had violated the prohibition on demanding unjustified benefits from suppliers, stating that the supermarket chain had not been allowed to choose dates as deadlines for the comparison of terms that came significantly before the discounter“s acquisition. Moreover, payments such as the aforementioned partnership compensation in relation to which there is no consideration cannot be requested.

Violations of competition law or antitrust law can give rise to severe penalties. That being said, these violations are by no means always obvious. Even individual contractual clauses can be in violation of applicable law. Lawyers who are experienced in the fields of antitrust law and competition law can advise businesses as well as enforce or fend off claims in the event of violations of either antitrust law or competition law.

https://www.grprainer.com/en/legal-advice/antitrust-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

Commercial agent“s right to claim compensation in the case of past clients

Commercial agent“s right to claim compensation in the case of past clients

Commercial agent"s right to claim compensation in the case of past clients

The commercial agent“s right to claim compensation in the event of turnover increases with past clients comes up time and time again as a contentious issue. A ruling of the Oberlandesgericht (OLG) Celle, the Higher Regional Court of Celle, has now bolstered the position of commercial agents (Az.: 11 U 88/16).

Following termination of the commercial agency agreement, the commercial agent is often entitled to claim compensation. This right normally exists if the commercial agent has established new business contacts for the company and the latter continues to benefit from these contacts. The matter frequently becomes a contentious issue in cases where the commercial agent further develops business contacts with existing clients and increases turnover. Until now, the case law has started from the premise that the commercial agent only becomes entitled to claim compensation if he or she has increased their old client“s turnover by 100 per cent. We at the commercial law firm GRP Rainer Rechtsanwälte note, however, that a ruling of the Oberlandesgericht Celle from February 16, 2017 has bolstered the position of commercial agents.

According to the OLG Celle“s judgment, the commercial agent might already be entitled to claim compensation if he or she has increased past clients“ turnover by more than 50 per cent.

In the case in question, the commercial agent had marketed certain products to pharmacies and cosmetic institutes. When the commercial agency agreement was terminated, he asserted a claim for compensation for turnover increases with three past clients, each of whose turnover he had increased by between 58 and 76 per cent. In the view of the OLG, there can be said to have been a substantial expansion of business relations if an increase in turnover of over 50 per cent has been achieved. Thus, the commercial agent was entitled to claim compensation in these three cases. The Court held that national case law, which requires turnover to have been doubled in order to give rise to a claim for compensation, is not consistent with the Directive on Commercial Agents (Council Directive 86/653/EEC of 18 December 1986).

The position of commercial agents has been strengthened by the OLG Celle“s ruling. Notwithstanding this, the issue of whether an increase in turnover of more than 50 per cent is sufficient as a general matter of principle for the purposes of claiming compensation will need to be clarified by further case law.

Lawyers who are experienced in the field of commercial law can advise companies and commercial agents on matters ranging from the drafting and eventual termination of the agreement to claiming compensation.

https://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

GRP Rainer Rechtsanwälte – Report on D&O insurance

GRP Rainer Rechtsanwälte – Report on D&O insurance

GRP Rainer Rechtsanwälte - Report on D&O insurance

In cases where damage or injury has occurred, it is increasingly common for the issue of D&O liability to take centre stage. For this reason, many companies have taken out a D&O insurance policy for their managers.

Besides a great deal of responsibility, a company“s governing bodies also bear a high risk of personal liability. Mere negligence can be sufficient to give rise to both internal as well as external liability on the part of boards of directors, supervisory boards or managing directors. To reduce their managers“ risk of personal liability, a lot of companies therefore decide to take out a D&O (directors and officers) insurance policy for their governing bodies and executive employees. According to a report by the commercial law firm GRP Rainer Rechtsanwälte, D&O insurance should always be tailored to the individual risks faced by managers to ensure that the coverage actually kicks in.

A common point of contention here is when the governing bodies cede their right of indemnity vis-à-vis the D&O insurer directly to the company. What has often happened in these cases is that the insurance company has not wanted to stand good. They argue that the companies do not intend to make a serious claim on their governing bodies but instead are only after the insured sum.

On this issue, the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, has bolstered the rights of policyholders substantially with two ground-breaking judgments (Az.: IV ZR 304/13 and IV ZR 51/14). In doing so, the BGH established that the seriousness with which a claim is brought is not a prerequisite for coverage kicking in if an insured eventuality occurs. Instead, the decisive factor was said to be the manger making the claim in written form. Moreover, the Court held that it is acceptable for the governing bodies to assign their right of indemnity to the company that makes a claim against them. Accordingly, ceding the right of indemnity to the aggrieved company did not constitute conduct amounting to a violation of contract. The aggrieved company can thus directly assert its claims against the D&O insurer.

When taking out a D&O insurance policy, one should therefore always make sure that the managers“ individual liability risks are optimally covered. A key issue here is ensuring coverage of the risk of both internal and external liability on the part of governing bodies. Other essential factors include, e.g. the extent of the insured sum as well as the issues of retroactive coverage and cover for follow-up liability.

Lawyers who are experienced in the field of company law can offer advice when taking out D&O insurance and enforce claims against the insurer.

https://www.grprainer.com/en/legal-advice/company-law/do-insurance.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

GRP Rainer Rechtsanwälte – Experience with right of authorized dealer to claim compensation

GRP Rainer Rechtsanwälte – Experience with right of authorized dealer to claim compensation

GRP Rainer Rechtsanwälte - Experience with right of authorized dealer to claim compensation

Like commercial agents, authorized dealers may also be entitled to claim compensation after the relevant agreement has been terminated. For this to happen, certain conditions need to be fulfilled.

Unlike commercial agents, authorized dealers operate under their own name and for their own account. The latter markets another company“s products under its own name, whereas a commercial agent enters into agreements and transactions on behalf of the company. In return, the commercial agent receives commission and is normally entitled to claim compensation once the commercial agency agreement has been terminated. We at the commercial law firm GRP Rainer Rechtsanwälte note that authorized dealers can also be entitled to this right to claim compensation under certain circumstances.

The reasoning behind the commercial agent“s right to claim compensation is that he has established business contacts which the company will continue to benefit from even after the agreement has been terminated and without having to continue paying commission. While the authorized dealer conducts business under their own name and bears the associated entrepreneurial risk, he might nonetheless be entitled to claim appropriate compensation from his contractual partner pursuant to sec. 89 b) of the Handelsgesetzbuch (HGB), i.e. the German Commercial Code.

One of the conditions for the analogous application of sec. 89 b) HGB entails the authorized dealer having committed to transfer their client base to the contractual partner, with the result that the latter can continue to benefit from the client data even after the agreement has been terminated. The authorized dealer should also be involved in the company“s marketing in a similar fashion to a commercial agent. He needs to be involved to the extent that he has extensive obligations to perform commercially-relevant tasks that are otherwise assigned to a commercial agent (BGH, VII ZR 315/13).

According to the provisions of sec. 89 b) HGB, the authorized dealer“s right to claim compensation cannot be excluded in advance. This applies both to authorized dealers operating in Germany as well as, following another ruling of the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, those operating within the EU or the EEA (ruling from February 25, 2016, Az.: VII ZR 102/15).

Authorized dealers may therefore be entitled to claim compensation, but certain conditions need to be fulfilled for this to happen. Lawyers who are experienced in the field of commercial law can serve as expert advisors in the event of legal disputes and when drafting agreements.

https://www.grprainer.com/en/legal-advice/commercial-law/authorized-dealer-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

GRP Rainer Rechtsanwälte – Abuse of a dominant market position – Antitrust assessment

GRP Rainer Rechtsanwälte – Abuse of a dominant market position – Antitrust assessment

GRP Rainer Rechtsanwälte - Abuse of a dominant market position - Antitrust assessment

Businesses are not allowed to abuse their dominant market position, as this constitutes a violation of antitrust law. The key issue that requires assessment is when this kind of abuse has occurred.

Abuse of a dominant market position constitutes a violation of antitrust law. According to the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany“s Act Against Restraints of Competition, a business is considered to occupy a dominant market position if it has no competitors or is not exposed to any substantial competition, or has a paramount market position in relation to its competitors. We at the commercial law firm GRP Rainer Rechtsanwälte note that one circumstance pursuant to which a dominant market position or superior market power can said to have been abused is when a business takes advantage of its contractual partner“s dependence or at least prompts the latter to grant it benefits for which there is no objective justification.

When it comes to assessing when this type of antitrust violation has occurred, the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, further strengthened the so-called „Anzapfverbot“, i.e. the extraction ban, in its ruling of January 23, 2018 (Az.: KVR 37/17). According to this, a violation can be said to have occurred from as early as when the company prompts its contractual partner to grant it benefits that have no objective justification and not only once an agreement has been concluded to this end. In the case in question, a supermarket chain had demanded more favourable terms such as „Hochzeitsrabatte“ (wedding discounts) or „Partnerschaftsvergütung“ (partnership compensation) from suppliers during the course of a takeover. These demands are impermissible according to the BGH“s ruling, because they were neither met with any consideration nor did they have any objective justification.

Following this decision, businesses with a dominant market position or superior market power should refrain from exploiting their position and making arbitrary or retrospective demands if there are no objective reasons underlying these demands.

The BGH“s ruling has thus bolstered the position of suppliers, yet it has also restricted the freedom to negotiate of businesses in a dominant market position. While this does not mean that driving a hard bargain for better conditions is forbidden, certain limits do need to be respected if one is to avoid violations of antitrust law.

Lawyers who are experienced in the fields of antitrust law and competition law can advise businesses as well as enforce or fend off claims in the event of violations of antitrust or competition law.

https://www.grprainer.com/en/legal-advice/antitrust-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

GRP Rainer Rechtsanwälte – Assessing manager liability in the event of imminent insolvency

GRP Rainer Rechtsanwälte – Assessing manager liability in the event of imminent insolvency

GRP Rainer Rechtsanwälte - Assessing manager liability in the event of imminent insolvency

One of a managing director“s duties is filing for insolvency on time. If this duty is breached, the managing director may be held personally liable.

Under no circumstances should managing directors ignore signs of imminent insolvency, as filing for insolvency in a timely manner is one of their duties. Failure to file for insolvency on time or making undue payments in spite of impending insolvency can make life extremely unpleasant for the managing director; his or her breach of duty can give rise to personal liability and an obligation to pay damages to both the company“s shareholders and creditors.

We at the commercial law firm GRP Rainer Rechtsanwälte note that the managing director is obligated by law to file for insolvency without undue delay, but no later than three weeks following the onset of insolvency or the company“s over-indebtedness. The initial decisive factor here is an assessment of the point in time when factual insolvency occurred, or when the company became insolvent or over-indebted.

According to the Insolvenzordnung, the German Insolvency Act, insolvency has occurred if the company is not able to meet its payment obligations. This condition is said to have been satisfied if a large proportion of due liabilities is not being paid, even if payments are still being made. However, it also needs to be assessed whether solvency is capable of being re-established within the three-week period. A company can typically be said to be over-indebted if its assets no longer cover the existing liabilities.

In the case of imminent insolvency, it is no longer permissible for any payments to be made that might reduce the insolvency estate. The managing director should therefore ensure that no more payments are made from within the company, including by other persons who are authorized to make payments. If the managing director breaches his duty, he may be held personally liable.

To avoid the risk of manager liability, if a company experiences financial difficulties it ought to be assessed whether insolvency has in fact already occurred or whether there are only some indications of this. Managing directors should take prompt action in these cases. Lawyers who are experienced in the field of company law can serve as go-to experts.

https://www.grprainer.com/en/legal-advice/company-law/managing-director.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en

Heirs within a patchwork family

Heirs within a patchwork family

Heirs within a patchwork family

Patchwork families, also known as blended families, are no longer a rarity today, yet succession law has yet to adapt to this development. According to the rules of intestate succession, stepchildren come away empty-handed.

Society has changed substantially over the last few decades. In addition to the traditional family model, patchwork families have also established themselves. It is common for one or both partners to bring children into the relationship. While the new partner assumes the role of a parent in practice, succession law continues to make a distinction between biological and stepchildren.

We at the law firm GRP Rainer Rechtsanwälte note that biological children are automatically entitled to inherit according to the rules of intestate succession. The same is true for adopted children. In the case of patchwork families, the decision is often made to forego adoption. This means that the stepchildren have no legal right to inherit in the event of succession. If there is a desire for the stepchildren to inherit, the testator must set forth this wish in a will or contract of inheritance. How he or she divides the estate among the heirs in doing so is a decision that is left up to him or her. Notwithstanding this, it is important to note that biological children are entitled to the compulsory portion of the estate in any case.

Thus, if the intention is for the biological as well as stepchildren to inherit, the testator needs to prepare a will or contract of inheritance. An elegant solution to this is a so-called „Berliner Testament“ (Berlin will). Here, the spouses mutually appoint each other as sole heirs and typically designate their children as final heirs. This means that both the married couple“s biological children in common and the biological children of only one of the partners to the marriage are accounted for.

Having said all of that, it needs to be borne in mind that a Berliner Testament has a strong binding effect and it is generally no longer possible to unilaterally alter joint provisions if no clause to this effect has been agreed in the will. If one of the spouses passes away, the other remains bound by the joint provisions.

When drawing up a will, it should therefore always be borne in mind that people“s situation in life can change fundamentally. It is equally crucial for the wording of a will to be clearly and unambiguously formulated, such that it leaves no room for interpretation and thus prevents disputes among the heirs from arising.

Lawyers who are experienced in the field of succession law can advise on all matters pertaining to wills and contracts of inheritance.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Kontakt
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24
info@grprainer.com
http://www.grprainer.com/en